The IT Nerd

I’ve been wondering for some time if Yahoo’s e-mail scanning for the feds and the fact that they got pwned by hackers a few years ago would cost them when it came to their impending sale to Verizon. We now have our answer. Verizon wants a $1 billion discount off its $4.83 billion deal to buy Yahoo according to the New York Post:

Verizon is pushing for a $1 billion discount off its pending $4.8 billion agreement to buy Yahoo, several sources told The Post exclusively. “In the last day we’ve heard that Tim [Armstong] is getting cold feet. He’s pretty upset about the lack of disclosure and he’s saying can we get out of this or can we reduce the price?” said a source familiar with Verizon’s thinking. That might just be tough talk to get Yahoo to roll back the price. Verizon had been planning to couple Yahoo with its AOL unit to give it enough scale to be a third force to compete with Google and Facebook for digital ad dollars. The discount is being pushed because it feels Yahoo’s value has been diminished, sources said. AOL/Yahoo will reach about 1 billion consumers if the deal closes in the first quarter, with a stated goal to reach 2 billion by 2020. AOL boss Tim Armstrong flew to the West Coast in the past few days to meet with Yahoo executives to hammer out a case for a price reduction, a source said. “Tim was out there this week laying the law down and Marissa is trying to protect shareholders,” said a source close to talks. “Tim knows how to be fair, while Verizon is pushing him, he can bridge the gap.” At the same time, the Yahoo deal team is pushing back hard against any attempts to negotiate the price down, sources said. Yahoo is telling Verizon that a deal is a deal and that telecom giant has no legal recourse to change the terms.

It would not shock me if this is the start of a tailspin in regards to this deal. Yahoo may go for the discount to keep the deal alive. But I suspect that as other things that Yahoo has done start to come to light, it may kill the deal. As a result, Yahoo will be back where it started. In trouble and irrelevant.

This entry was posted on October 7, 2016 at 10:15 am and is filed under Commentary with tags verizon. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.